A senior official at a private insurance firm recently said, "Unit-linked insurance plans (ULIPs) bakwaas product hain. (ULIPs are bad products) They should be banned in India because they are not investor-friendly." Coming four years after the Insurance Regulatory and Development Authority placed severe restrictions on upfront commissions and charges on ULIPs, the statement seems like a case of sour grapes. Indeed, prior to September 2010, when the restrictions on the product came into force, ULIPs were the darling of insurance firms and their agents. So are insurers finally becoming pro-investor? Or, has the realisation dawned after agents have stopped pushing the product due to low commissions?
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